Podcasting is one of the most powerful tools for building your brand. But if you’ve ever been a podcast host, you know that it doesn’t always come easy. In this episode, Tom Hazzard and Tracy Hazzard show you why podcast hosting companies quit and what you can do to avoid it. The truth is that when you run a podcast business, you’re responsible for everything from how your content looks to how fast your site loads. And if there’s one thing that can really slow down your growth rate—and make it harder for you to keep up with demand—it’s when things go wrong with your podcast hosting service provider. So tune in now and learn how you can ensure you don’t fall in the same pit of failure!
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Why Podcast Hosting Companies Quit And What You Can Do To Avoid It
In this episode, we’ve got a subject that, quite honestly, I’m surprised we’re going to talk about because it’s happening too often these days.
You’re surprised we have to talk about it. You’re not surprised we are talking about it.
This is happening enough that it’s a topic we need to cover. That is about podcast-hosting companies that are going out of business, why podcast-hosting companies quit, and what you can do to protect yourself from it or what you can do to avoid it. I was surprised this keeps happening. That’s why. It happened once in 2022. I was like, “This company is going out of business and not doing it anymore. That’s weird.” It has happened again and again with some of the smaller players.
What we want to do is talk a little bit about the fact that this has been happening ongoing over time when companies don’t completely shut down. What has happened is Sounder.fm is closing down. It’s happening actively where the entire company is shutting down. It’s a little more exacerbated by economic conditions and some other things. It’s not just a division of a company. Simplecast did this quite a few years ago right before they got bought by Sirius. Simplecast closed down the production side of their business, stopped doing that, and had to figure out how to transition clients.
You might see it in some FAQs on some people’s websites that I’m mentioning here. They politely call it sun-setting. This is a nice way to say, “We quit this aspect of our business. We shut this down. All of you are out of it. Here’s how you sunset.” They slowly move you out of this and into something else. Everyone gets stressed by moving to a hosting company, but it’s not that difficult. Losing a production company, any larger businesses like that, or the advertising revenue you were expecting is a big deal. That’s why we are mentioning this and talking about this. You need to pay attention.
Let’s paint this picture for you as a podcast host. You have a host, everybody has to in order to have their podcast on all the listening apps. You’re publishing episodes. You’re into a rhythm. Everything is fine. A lot of times, one of the last things you want to do is think about changing one of your processes, systems, or software you use. You get comfortable with what you’re doing. You get an email from your podcast saying, “We’re no longer going to be doing this. You need to move your show off our platform to another one in a month. Otherwise, your show will cease to exist on all the listening apps.” You’re like, “What?”
What shocked me is that the last two companies that did that didn’t offer another resource. They didn’t say, “We have already made an arrangement with this company to take over your show. This is what we would do. We would make continuity available to you.” I can’t even imagine a company not being because there are dozens of hosting companies. You could easily make an arrangement. You probably could get somebody to pay you to give you their clients. Why wouldn’t you do that?
In some bigger examples where something like this has happened where a larger company buys a smaller company and gobbles them up, the service is continued. That’s a little different situation. This is a company saying, “We’re out. We’re not going to do it anymore.” They leave you to yourself to figure out what to do. I agree with you. That’s not very cooperative.
Part of the problem with Sounder specifically and some of these other companies is that their podcast-hosting was free or subsidized and inexpensive. It’s why they’re shutting it down. It’s what it is. It’s because they offered this freemium model where they were going to make up the dollars on the ad side of things. Acast shut down their listening app because it was free. They couldn’t continue to support the listening app because they weren’t making enough money in the business they thought that it would lead be leading them to.
It’s the same thing with Sounder. In this case, Sounder thought the advertising would subsidize the cost of hosting, and it didn’t. The shocker is that some ex-Google and ex-Spotify people couldn’t figure out the model of business that could work and thought that this freemium thing would work out. They should know better. They should know it takes enough volume, and they didn’t get there, but they didn’t. That’s what happens in this process. That’s what they thought would subsidize that. They’re like, “You got it for free. We don’t owe you anything.” That’s not right from an ethical perspective and a business perspective. That’s not how I want to show up in the world.
Tom, I know you agree with me on this because we have talked about this for other companies that this has happened for. We set out a process that said, “If we decide to discontinue any single service within our company, we will create continuity for you in some way, shape, or form. We will give you an extended transition period and help you through that.” It’s not right to shut something down that someone was depending on because whether or not they paid you for it, they took a risk with you. They decided to take the leap and come over to you because Sounder didn’t exist in the beginning.
Somebody decided to leave one of their other hosting companies to move over. They said, “I’m going to take a risk on you. I’m trusting in your business model. You have something.” You’re going to reward that trust with no help, transition, and offer, “Here’s a notice.” That’s what happens a lot when the company gets bought out. The new company has no loyalty to it. That does happen a lot there, but in this particular case, there’s no buyout happening. I find it reprehensible. It’s why we haven’t been kind. We have done some messaging.
We have not been kind in our comments about the platform that has left people in the lurch. Let’s put it that way. As people in a company, we certainly try to be very kind.
We haven’t masked our language and have been polite about it. We have been saying, “You are out of luck. We’re here to help. We’re going to pick up these pieces for you,” but we aren’t sugarcoating that. What they did wasn’t right. There are some signals that you need to pay attention to so that you can avoid this. That is when you are looking at a hosting company that is offering you something for free, you ought to make sure that the business that’s on the other side of that is sound.
Sounder’s business wasn’t sound, pun intended there. If you are watching what’s going on economically, there are a whole bunch of articles going out about the state of the podcasting advertising economy. What I want to remind you all is that less than 2% of all podcasts out there ever make enough money in advertising to make it worth doing. That means that the pool is extremely small. We’re talking about less than 100,000 or 60,000 podcast shows that could even possibly make any advertising dollars out of 2.5 million shows. If they’ve got this freemium plus advertising model, I would worry.
What we often say is, “Free isn’t always free.” You get what you pay for in that situation.
With it comes risks. This is the thing. They’re blaming it on podcast discovery problems because then they can push the blame on Spotify and Apple. They’re saying, “Podcast discovery is so bad. That’s why we can’t make it work,” but the reality is companies like Sounder were relying on advertising dollars and freemium plus advertising. Spotify and other companies like them are taking over the lion’s share of what’s left of the ad dollars. The ad dollars are in decline in 2022.
While they’re flat, that’s not in decline. I want to clarify that. We did talk about that. You can go back to another episode when we talked about advertising. The market that’s happening there is its flat growth, meaning it grew year-over-year to 24%, but that’s flat growth. It’s not expected to grow more in the next year. It doesn’t mean that there’s no growth in podcast advertising. I want to be clear on that.
There are so few shows that qualify for that premium level of advertising. Spotify has been garnering and building all the brands. There isn’t as much room in the smaller advertising platforms for them to get those ad dollars. Their shares are in decline. That’s where Sounder fell apart and where others have fallen apart. The other part of it is that there has been this tremendous overvaluation spend. Spotify spent way too much money. If you want to know why they’re letting people go, it’s because they overspend. They shouldn’t have spent those crazy 30-plus exit valuations on buying shows.
We have even seen it happen. I heard of two shows that got bought at the end of 2022. I know that their valuations were ten times more than they’re going to be worth in 2023. Someone overspent, whether they overspent when they bought out a company and the podcast was a part of it or all of those things. What’s the other company that went out of business in 2022?
I’m glad I found this out because it’s one of those things that were bugging me as a podcaster. It was a mental block. I couldn’t even focus on anything else until I figured this out. It was called Tandem.
Tandem went out of business midyear.
They went out of business on July 1st, 2022. We got panicked calls from people saying, “I don’t what to do.”
It happened abruptly.
It’s a very easy thing to switch your hosting. You have the old RSS feed. A good podcast host like Podetize can import and duplicate it.
You don’t lose your statistics if you go with the right host. There are many companies you lose it with.
I don’t even know anybody other than Podetize that will maintain your statistics. I don’t know of any. I’m not saying there aren’t any. There are so many obscure little companies out there. There may be someone that does.
Libsyn doesn’t. SoundCloud doesn’t. Anchor doesn’t. None of those.
All they will do is import your content, but then your stats start from zero. On Podetize, we have to wait until your show is imported to redirect your feed from your old host to Podetize. That’s the process. Once that’s done, and no more stats are being accrued in that old platform, you export. I’ve been shocked to find there are a couple of platforms that don’t allow you to export your total episode downloads with the per-episode data. We have found one that only will export the total number of downloads across all episodes, but that’s not helpful to know what you had for each episode. In our system, you export data from an old platform. It’s usually a spreadsheet. Each episode has a number, “This episode has 1,237 plays.”
It totals up to your total download.
We import that into our system per episode and match up the total downloads you had on the old platform, and then your downloads keep adding to that on Podetize. The total history of downloads has been maintained. That’s what a lot of podcasters want. They get pretty attached to their analytics and their numbers because they achieve certain milestones, and that has meaning. To change hosts and start all over, you can save that number, have it somewhere, and then keep adding to it to know what your total is, but that’s a hassle.
You shouldn’t have to maintain that on Google Sheets. There are no spreadsheets for you. We don’t want to do that. We want you to podcast and forget all that. That happens. That’s why people get panicked and worried about it, but the transition is relatively simple and should be not difficult. There are companies that don’t help you through it and don’t make it easy for you. Part of the problem is they make this a difficult process. Let’s recap. Tandem went out of business. Sounder is on its way out of business.
January 31st, 2023 is their last day.
Acast listening app went out in April of ’22. That’s their listening app side. They had two million users. That’s crazy. I’m sure that people tried and then don’t use it. All of us register shows on it. All the podcasters have accounts but never use the app. That’s why it didn’t work out for them. Facebook closed down the whole podcasting thing that they were working on in June of 2022. That was a mess.
That was a colossal failure. Honestly, that one went down because it wasn’t in the podcaster’s best interest. Facebook was trying to use podcasters’ content for their benefit. Podcasters saw through it. It wasn’t being adopted, so they killed it.Podcast companies are letting people go because they overspent. Click To Tweet
That’s part of what we’re seeing in going in decline. Libsyn Studio, which is the creative agency side of it, uses a division they had called Podcast Ad Rep. Both of those stopped in November of 2022. They stopped both of those divisions because the ad revenue was not there. It’s too hit or miss. You start up a podcast with the idea of creating it to make podcast revenue. The ad reps can’t sell it because the creative is 1 out of every 10 succeeds. It’s too low. The cost of labor for that creative services is too high. All of us know that starting a podcast isn’t hard. You can start a podcast. Starting a successful podcast is hard. There’s nothing to starting one nowadays. This is what Anchor depends on.
That’s what they tell you. That’s why you have so many numbers that are pretty hard to believe for so many users.
Anchor’s number can’t be believed. Anchor claims to have five million users.
It’s completely unbelievable. There are not five million podcasters that have ever existed on this Earth. I may have to walk that statement back a little bit in terms of people who have ever started a podcast. In terms of podcasts that are live in the ecosystem, there are about two and a half million, but there are so many of them that are dormant. They stopped publishing months or years ago. There are only about 320,000 that are actively publishing new episodes.
People start because Anchor is free. It’s the freemium model that creates this. It’s a BS model because those aren’t real users. They logged in, said, “I’m going to start a podcast,” and then never even set it up or started it.
I don’t believe it has been syndicated and has been able to be played by anybody.
Even still, to say that two times the number of podcasts that have ever existed or that are live, there’s also someone who didn’t start a podcast. That’s too high. It should be 20% more or something like that. It doesn’t make sense.
The number isn’t meaningful when you know that there are only 2.5 million total podcasts in the ecosystem nowadays, and 1/8 of them are actively publishing new episodes. It’s not a meaningful number. I don’t think it helps the podcast industry. It does a disservice to the podcast industry. I don’t see how that’s useful except to help Spotify try to appear like a big player. Anchor is owned by Spotify.
It makes you look like a bigger failure. This is the number. If a podcast-hosting company is out there saying, “We have 5 million users,” and out of that, they have 30,000 active podcasts, that’s a bigger failure than saying, “Out of the 2.5 million podcasts, we have this many users that’s realistic to their share of the marketplace, and 30,000 of them are successful are actively posting.” That’s a more realistic conversion rate if you look at that 5 million number.
That sets off alarm bells in my head. This is what I want you to all do. When you’re reviewing a hosting company, take a look at those numbers, do the math a little bit, and check it out because if their conversion rate is so low, your chance of starting a successful podcast on their platform is slim. If their percentage of premium podcasts or hosting podcasts that are paying for it to freemium is too extreme, there’s a good risk they’re going to go out of business in 2023.
The last one is if their model is 100% reliant on ads, and they’re not Spotify, you should worry too. That’s where we’re going in this marketplace. That’s my thing. My prediction is that HubSpot will fail again in 2023 in its podcasting model. They failed in 2018. They’re going to fail again in their podcasting model. That’s my prediction on the next failure we will hear about. HubSpot will discontinue its podcasting again at some point in the next six months.
That wouldn’t shock me at all.
The other thing is that we’re going to see a lot more production studios shut down with a lot of these fly-by-night video companies or marketing agencies. I’m hearing a lot of people who are refining their business model and realizing what made them money and what’s working for them. They thought, “We’re already offering video. We should offer podcasting too.”
They’re realizing that they don’t know what they’re doing. The success rate is low. The dissatisfaction is high. They’re going to go out of business. We’re going to see a lot of those overpriced studios be unable to compete and shut down their production services and support of podcasts. We’re going to find that happen. That’s my other prediction on that side of things.All of us know that starting a podcast isn't hard. You can start a podcast. But starting a successful podcast is really hard. Click To Tweet
I have another data point to help you with. We have a database of every podcast in existence.
Maybe PodListR will be live, and you will all be able to check it out.
We have a database of not only every show in existence but also metrics by which we evaluate what are the active shows. I mentioned earlier that there are about 320,000 shows actively publishing episodes on a regular basis. In terms of how many of them are hosted on Anchor, 53,000 of those. Let’s, for a moment, say their five million number is accurate. I have a lot of doubt and skepticism as to that but let’s say it is.
That’s a 99% podfade.
It means 1% of the shows that they claim are hosted on their platform. 1.06% are actively publishing episodes. That’s not exactly a good batting average in my perspective.
This is the problem when you think about an organization like that. You’re maintaining servers. Those other podcasts aren’t taking up hardly any server space.
There’s no bandwidth if they’re not actively publishing. Nobody is streaming.
That’s not costly, but what is costly is maintaining that database of users and the continuity and making sure they can access their accounts. Even though they’re not using it, you still have to make sure that happens. It’s customer service.
It’s customer support.
There’s billing because, at some point, you want them to be able to upgrade. Are you marketing to them? There are a lot of costs in that. I can’t even imagine the open rate. If you’re sending portal messages to everybody, then your open rate must be in the toilet. That can’t be good either.
Free isn’t always free. That’s what we’re seeing. That’s why some of these platforms are going under. It’s very interesting when it came to Sounder. We have a list. Every podcast has an email that is registered for it. You can’t publish a podcast without having an email address that is public. We have sent out emails to all the Sounder podcasts that are actively publishing with some fun messages to get their attention about how they’re going to be homeless soon and things like that.
We’re inviting them to come to Podetize and giving them a deal for some time free while also highlighting the benefits of hosting with Podetize, one of which is our service because our customers get these calls live and have Q&A every week. There are lots of reasons why paying for a podcast host is probably in your best interest. One of them is continuity. They’re going to be around, especially if you’re paying for them.
If that’s their business model, that works. That’s why I want all of you to think about it, especially those of you out there starting a podcast in 2023. We have a lot of people because it’s the start of the year. This is your resolution for the year. I know you want to be on a budget and be cost-effective, but also, don’t take to so much risk with your business. If you’re seeing it working, then move it. Make sure you’re going with people who can support you because, at the end of the day, if you don’t create a successful podcast, you didn’t create a podcast.
It was more for you than for others. There has to be a better balance. You’re going to keep doing it if you’re getting something out of it as a podcast host, but if you’re not serving people or if you’re not supporting others and if your message to the world isn’t being heard, what’s the point other than satisfying yourself? You could be recording and not publishing it at that point.At the end of the day, if you don't create a successful podcast, you didn't create a podcast. Click To Tweet
Don’t spend any money.
Record your memoirs. Maybe it will be a book someday.
We are trying to cover more of these topics here to give you a more economic view of how podcasting is working in an industry-wide view and the high-end tactical. We’re thinking, “What does it take to make a great podcast?” That’s why we’re here. We’re not here for that me-too coaching stuff that you could get anywhere. You can take our course and join any one of our videos.
You can join in and learn how to do all that stuff anywhere, but if you want to know what tactic to try, what we have tried, what’s working, what we’re seeing working, what pattern is going on in the industry, and what pattern is going on with the successful podcasters I interview on The Binge Factor and what we have in our company, then you’re in the right place.
We invite you to submit your topics at any time. You can always go to our website and submit through there, or if you are one of our clients, you can always go to our Help Team and submit through them as well. We are available everywhere on social media. You can reach out to us and send us a DM or a comment, and we will get it and incorporate that into our content for 2023.
Thanks so much for reading, everybody.